Hundreds of thousands of demonstrators marched through the capital Teheran, chanting 'Death to America' and burning effigies of U.S. President George W. Bush and Israeli Prime Minister Ehud Olmert.

Mr Ahmadinejad's speech before the crowd appeared aimed at showing an image of strength of his hard-line camp ahead of key parliament elections in mid-March.

Iran's ruling clerical establishment has worked to keep reformists out of the vote. Earlier this month, Ahmadinejad's Interior Ministry disqualified more than 2,000 pro-reform candidates from running in the election. The hard-line constitutional watchdog, the cleric-run Guardian Council, is to announce the final list of approved candidates in early March.

Mr Ahmadinejad's popularity has been deeply hurt by Iran's economic woes over the past year and the vote is seen as a key test of the president's hold on power. The barring of the reformist candidates has infuriated liberals who were hoping to stage a comeback in the vote.

One reformist faction, called the 'Mujahideen of the Islamic Revolution,' issued a statement on Monday calling the barring of the candidates 'one of the ugliest events in the history of the revolution, creating deviations from the ideals of the most humane revolution.'

It called on Iranians participating in ceremonies marking the anniversary to 'make all efforts to prevent the transmuting of the revolution's ideals.'

State-run television said millions of Iranians took to the streets across Iran to mark the anniversary of the 1979 revolution that toppled the pro-US Shah Mohammad Reza Pahlavi and brought hard-line clerics to power.

In Teheran, Mr Ahmadinejad vowed to push ahead with both the nuclear and space programme and rallied Iranians against UN Security Council demands that Iran stop enriching uranium.

Nuclear programme provoked unease
Like Iran's nuclear activities, the country's space programme has provoked unease abroad because the same technology needed to put satellites into space can be used to deliver warheads. Iranian officials have insisted both programmes are intended for peaceful purposes.

'I ask the people's view. Would you agree if I ... gave in, surrendered or compromised over the nuclear issue? Would you agree to give up one iota of your nuclear rights?' Mr Ahmadinejad asked.

The crowd chanted in response: 'No!' and 'Nuclear energy is our definite right.'

The US has led the push for a third round of UN sanctions against Iran for refusing to halt uranium enrichment, a technology that can be used to produce nuclear fuel or material for an atomic bomb.

Last month, the five permanent Security Council members - the US, Russia, China, Britain and France - agreed on a draft resolution for new sanctions.

Mr Ahmadinejad said on Monday that Iran won't be frightened by the threat of more sanctions. He also warned the Security Council that it risked losing its credibility.

The Iranian president also said Iran will launch two more research rockets into space before putting the first Iranian-made satellite into orbit hopefully by this summer.

Earlier this month, Iran said it launched its first research rocket into space and unveiled its first major space centre and indigenous satellite - called Omid, or Hope.

'Today, we possess all the fundamental sections needed to launch a satellite into space,' said Mr Ahmadinejad. 'We built all (of the sections) ourselves.'

The US called the Feb 4 rocket launch 'just another troubling development', saying it was a cause for concern about Iran's continuing development of medium- and long-range missiles.

Not clear how developed space programme is
Despite the anxiety over Iran's space programme, it is not exactly clear how developed it is, and analysts have expressed doubts about such technological achievements announced by the country in the past.

On Monday, Mr Ahmadinejad offered the first details about the Feb 4 launch, saying the first section of the rocket - called Kavoshgar-1, or Explorer-1 - detached after 90 seconds and returned to earth with the help of a parachute.

The second segment entered space for about five minutes, he said, while the final section was sent 'toward' orbit to collect information to determine the best future route for the Omid satellite.

Iran has said it wants to put its own satellites into orbit to monitor natural disasters in the earthquake-prone nation and improve its telecommunications. Iranian officials also point to America's use of satellites to monitor Afghanistan and Iraq and say they need similar abilities for their security.

In 2005, Iran launched its first commercial satellite on a Russian rocket, in a joint project with Moscow, which appears to be the main partner in transferring space technology to Iran. -- AP